Define: Associated Company

UK Accounting Glossary

Definition: Associated Company


Quick Summary of Associated Company


One company exercises significant influence over another, falling short of complete control.



What is the dictionary definition of Associated Company?

Dictionary Definition


In accounting and business valuation an associate company (also known as an associate or associated company) is a company in which another company owns a significant portion of voting shares, usually between 20 – 50%. In this case, an owner does not consolidate the associate’s financial statements.


Full Definition of Associated Company




Examples of Associated Company in a sentence


One should be concerned with how the associated company is to be treated in the parent’s consolidated financial statements.
Jones Textiles Ltd. and its associated company Highgrade Fashion were subject to tax advantages as a result of the new regulations.


Associated Company FAQ's


What is the difference between an associated company and a subsidiary?

An Associate Company is defined under the Companies Act, 2013 as a company in which that other company has a significant influence, but which is not a subsidiary company of the company.

A Subsidiary company refers to a company in which the holding company either:

  1. controls the composition of the Board of Directors; or
  2. exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies.

Therefore, an Associate Company, is a company in which another company has a significant influence but not enough to gain a majority stake.

A company which holds more than 20% stake in other company is termed an Associate Company; but when it holds more than 50% stake it is then classed as a Subsidiary.


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https://payrollheaven.com/define/associated-company/
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Associated Company. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. July 22, 2019 https://payrollheaven.com/define/associated-company/.
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Associated Company. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/associated-company/ (accessed: July 22, 2019).
American Psychological Association (APA):
Associated Company. PayrollHeaven.com. Retrieved July 22, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/associated-company/

Definition Sources


Definitions for Associated Company are sourced/syndicated from:

  • Oxford Dictionary Of Economics
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd December 2018.